The increased tension in the region is a setback for an airline that only recently received a 20bn rupee bail-out package from the government, and saw its financial situation improve over the past few months.

To make things worse, it also faces demands for higher pay from pilots.

Potential problems

PIA's chief operating officer, Khursheed Anwar, told the BBC's World Business Report that the airline had not yet experienced a fall in passenger numbers.

However Mr Anwar believes this is due to the backlog of travellers, as many flights were cancelled immediately after the attacks.

"We feel that advance bookings may be cancelled in the month of October and that's when major problems could start," he said.

Mr Anwar said he did believe that the lifting of US sanctions against Pakistan would help PIA, and Pakistan business in general.

"We expect to see an improvement in traffic both in passenger and freight... and also we hope that our currency will stabilise and not depreciate as it has been doing in the past," he said.